Crypto stocks trading on fundamentals

What happened: Bitcoin reclaimed $72,000 on Thursday, lifting crypto and stocks, but not all crypto stocks followed suit. Circle and Bullish, despite Bitcoin's rise, fell about 10% and 6% respectively. Meanwhile, a once high-flying crypto stock, favored by Cathie Wood, is now down 66% from its record highs. Strategy, a Bitcoin treasury firm, shifted its approach, moving away from passively holding Bitcoin to actively managing its balance sheet.

Market impact: The divergence in performance between Bitcoin and some crypto stocks suggests that the market is increasingly focusing on fundamentals rather than just Bitcoin's price movements. This shift could lead to more volatility and selective investing in the crypto sector. Companies like Circle and Bullish, which have been closely tied to Bitcoin's price, may face increased scrutiny on their fundamentals.

What to watch next: Investors should closely monitor the upcoming earnings reports from Circle and Bullish to gauge their fundamentals. Additionally, the launch of Kalshi's crypto perpetual futures contracts in the U.S. could provide a regulated alternative, potentially drawing more institutional investors into the crypto market.